BT is slashing the cost of its core broadband products for internet service providers in an attempt to prevent the nation's web connections grinding to a halt under the weight of bandwidth-hungry applications such as the BBC's iPlayer.

'There has been a lot of noise from our customers that end-users are consuming a lot more bandwidth,' said Steve Robertson, who runs Openreach, the business that leases BT's lines to its rivals. 'For us there is a real potential bottleneck that has to be addressed now.'

The situation will only get worse as the BBC puts more of its content into high definition format and, along with ITV, starts making entire channels available online.

Openreach provides a series of so-called backhaul services which ISPs, including BT itself, use to connect customers to their own networks. It is in these networks - where consumer's connections are aggregated - that bottlenecks have appeared in recent months.

To alleviate the strain, BT is dropping the connection fee for its largest product - which offers speeds of one gigabit per second - by almost two-thirds, while its annual rental is coming down by a third from 1 February to about £10,000.

The fall in the price of BT's ethernet products comes as the recession forces operators to rethink plans to spend billions on the next generation of internet access networks. Even BT boss Ian Livingston admitted recently he was coming under pressure to drop plans to spend £1.5bn over the next four years bringing super-fast access within the reach of 10 million British households.